ACCC Condones Commonwealth Bank’s Actions Despite Warnings it Could Disadvantage Consumers

If this does not occur, brokers are required to pay $500 to attend a CBA “re-accreditation workshop”, the mortgage broker revealed in a letter to the ACCC last month. Or, they won’t be able to offer CBA loans.

Mr Ormond warned in a letter to the ACCC: “It would be valid for consumers to ask: if a broker is recommending a CBA loan, is that the best loan, or is it being recommended so the broker won’t lose their accreditation?”

He said brokers would feel pushed into favouring one big lender over the smaller banks, building societies, credit unions and international lenders they also represented.

“CBA’s action gives every appearance of a brazen attempt to exercise its market dominance by reducing competition” .

Mr Ormond added recent takeovers and mergers within the banking sector – including Aussie Home Loans and Bankwest by the CBA, and RAMS by Westpac, had already reduced competition in the market.

Commonwealth Bank and Westpac already have a combined market share of 70 per cent, according to Mr Ormond, who claimed the CBA may be abusing its market power under the Trade practices Act.

The ACCC rejected this, saying of Australia’s biggest bank: “Without embarking on detailed analysis of the relevant markets, we consider it is unlikely the CBA possesses a substantial degree of power in the market.”

“Even if it could be established that the CBA did possess the requisite power in a market, a contravention only occurs where the conduct is engaged for an illegal purpose.”

Mortgage Industry Association of Australia chief executive Phil Naylor said the banks control about 90 per cent of the home loan market already, with the big four banks (CBA, NAB, ANZ, Westpac) having “the lion’s share”.

Representing 13,000 individual brokers, Mr Naylor said his organisation is working with lenders so broker accreditation depends on the quality rather than quantity of home loans written.

A bank spokesman told The Australian newspaper tighter broker accreditation is part of a wider broker education exercise.

“Brokers who were not writing CBA home loans regularly might not understand the products and customers could suffer as a result.”

It’s reported about 40 per cent of CBA’s home loans derive from mortgage brokers.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of